Streaming services are wildly popular, with the major players like Netflix, Hulu, Disney+, Max and others making a solid case for users to cut the cord, but recent research suggests the beginning of cracks in the streaming services model as consumers begin to cut their spending on those services.
Essentially, the sheer number of streaming platforms is becoming untenable, as recent data suggests users are cutting back on their streaming spending as they become too expensive, and some are even going back to cable.
According to consumer technology research firm Parks Associates, the annual churn rate for streaming video services stands at 47%, with 29% of internet households responding to a survey saying they canceled at least one service to save money.
Other top reasons cited for cancelling streaming services include finishing watching a certain show, not finding anything good to watch, a promotional price ending, and prices increasing.
Other recent Parks Associates research further suggests that consumers are curbing their spending on streaming services. According to the research firm, household spending on streaming subscription services has declined 25% to $73 per month, compared to $90 in 2021.
In addition, nearly one-third of households were using free, ad-based services by the end of 2022, posting the fourth consecutive year of market share growth since 2019.
Indeed, many streaming services have been raising prices for their ad-free offerings, and many are also adding ad-supported versions at cheaper rates. In addition, some services like Netflix are cracking down on password sharing, essentially forcing users who were using a family member’s or friend’s account to sign up for their own account.
Meanwhile, the Q2 2023 Video Trends Report from TiVo found that 27% respondents with pay TV plan to cut the cord within the next six months, suggesting that the cord cutting movement is still alive and well.
However, a new trend is also emerging among consumers who once cut the cord: they are contemplating a return to cable. TiVo’s second-quarter report found that 28% of cord cutters are later deciding to subscribe to traditional TV service.
According to TiVo’s research, streaming service spending averages more than $170 a month, and consumers are averaging 10.9 content sources per person.
Essentially, streaming services are becoming more abundant and expensive, which is flying in the face of the purpose of the cord cutting movement.
According to TiVo, live sports are at the center of why many consumers are reconsidering their cable and pay TV services. Currently, the live sports streaming market is fragmented, with consumers reporting having difficulties navigating the different streaming services and finding the game they want to watch. Cable and pay TV can simplify that process.
At CEDIA Expo 2023, executives from Peacock and Paramount+ joined a panel to discuss the sports streaming How Integrators Can Tap Into Live Sports StreamingHow Integrators Can Tap Into Live Sports Streamingopportunities for integrators, with those very issues cited as their top challenges.
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